Embracing the Path to Financial Wellness

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2 Embracing the Path to Financial Wellness MODERATOR: Rachel Weker, Vice President, T. Rowe Price Retirement Plan Services PANELISTS: Tina L. Stamato, Senior Manager Pfizer Savings Plans, Pfizer Dina Pon, Assistant Vice President of HR, GEICO Rich Linton, President of Large Market and Retail Wealth Management, Voya Financial Michael Domingos, Vice President, National Corporate Strategy & Distribution, Prudential Retirement

3 America is Financially Unwell and Savings Behaviors Show It 70% Of Americans live paycheck to paycheck CNNMoney % SAVINGS PRIORITIES LEAKAGE 7.3 % average pretax deferral Current expenses 46 % 24 % of active participants have $2.8 billion in outstanding loans 24% Of their paycheck goes to consumer debt payments U.S. Census Bureau et al Can t cover a $1,000 emergency without borrowing MarketWatch % not using Auto-Increase Outstanding debt 24 % $130 million in hardships during 2014 Source: T. Rowe Price Retirement Plan Services, Inc., 6/30/2015 (defined contribution plans on OMNI recordkeeping platform).

4 Financial Wellness Needs Span a Broad Spectrum ADVANCED Trust & Estate Income Planning INTERMEDIATE Long term savings needs Investing FOUNDATIONAL Debt management Budgeting Emergency preparedness

5 Do you currently offer a Financial Wellness solution to your employees? 1. Yes 2. Yes, and we are further enhancing 3. No, but we are considering adding 4. No, we are not considering at this time Thank you to our Diamond Sponsor

6 For those offering or considering a financial wellness program, what s the most significant benefit? 1. Improving retirement outcomes 2. Decreasing employee time spent addressing financial issues 3. Aiding in employee attraction and retention efforts 4. Improving employee satisfaction 5. Other Thank you to our Diamond Sponsor

7 For those not adding a financial wellness program at this time, why not? 1. Not currently a top priority 2. Don t think it will make a difference to employee behavior 3. Don t see it as the employer s responsibility 4. Can t afford it 5. Other Thank you to our Diamond Sponsor

8 SmartDollar Serves as a Complement to the Participant Experience A step-by-step approach to handling personal finances and building a smarter future. Highly engaging materials Attention-grabbing topics Integrated into the participant experience Proven to change behavior* Source: SmartDollar, The average person pays off $5,300 in debt and saves $2,700 in the first 90 days of the program.

9 SmartDollar Experience Demonstrates the Ability to Effect Change IMPROVED EMOTIONAL OUTLOOK FINANCIAL DISTRACTIONS AT WORK 37% 18% 21% 12% 13% 22% Very Often Distracted Often Distracted Sometimes Distracted Current = 90 days into the program At start of program 2-5 years later FINANCIAL STRESS RETIREMENT PREPAREDNESS 20% 5% 29% 12% 34% 33% 39 % Program participants who are saving 15% of their salary for retirement after 2 years in the program Overwhelming Stress High Stress Some Stress At start of program 2-5 years later Source: SmartDollar, 2015.

10 Embracing the Path to Financial Wellness Tina L. Stamato, Senior Manager Pfizer Savings Plans Pfizer

11 Pfizer Life Stages Program Meeting the Colleague Where They Are Today Overview: Launched Jan. 1, 2012, in partnership with Fidelity Investments A multi-media, targeted communication program Reinforces Pfizer s commitment to providing the tools, resources and support Designed to: Help colleagues meet their retirement savings goals; and Maximize their benefits Identifying Personal Financial Goals Budgets Debt management Benefits utilization Multiple savings goals Tax strategies and insurance planning Saving for the Future Maximizing savings Investment support Monitoring progress Exploring other options: catch-up, Roth, conversions, IRAs, etc. Preparing for Retirement Calculating retirement benefits Income planning Broader wealth planning and transition support

12 Pfizer Who We Are Average age: 46 Average tenure: 11 years Approximately 55% of Career Pfizer Colleagues are On-Track for Retirement* 96% participate in 401(k) 89% maximize the match 10.5% Average Deferral Rate 12% have elected Roth 401(k) 85% have spillover I m saving for retirement, but what about my other financial goals? *Measured as replacing 85% of pre-retirement income at age 65; Career Colleague defined as >25 Years of Service at Retirement

13 Evolution of Life Stages 2012 (Launch) Rolled out a custom Life Stages program guide Mailed individual Savings Plan Scorecards Launched PSP Modeling Tool and Retiree Medical Modeling Tool 2013 Introduced two custom workshops Initiated 1-1 financial planning sessions at key locations Updated and expanded custom Life Stages program guide 2014 Expanded to four custom workshops Expanded 1:1 financial planning sessions Refreshed Retiree Medical Modeling Tool Expanded Life Stages to support Health & Insurance Annual Enrollment 2015 Expanded to eight custom workshops across different financial wellness topics, with focused messages for key populations (Nonqualified Plan Eligible, Women Investors, Puerto Rico, etc.) Delivered 22 Seminar Days and 30 Webinars Launched Total Rewards Statement to show colleagues the full value of their Pfizer compensation and benefit programs Over 10,000 unique users in first four months Leveraged Life Stages Campaign to outline enhancements to the Pfizer Savings Plan and educate colleagues regarding required actions Continued emphasis on 1-1 guidance on-site and via phone 165 on-site 1-1 days, and 7,500 calls Introduced additional communications and Tip Sheets to guide Pfizer colleagues as they plan

14 Where We re Headed in 2016 Roll out new Financial Planning & Guidance Site Leverage Life Stages to support onboarding of acquired organizations Prepare colleagues for upcoming Pension Plan Freeze / Retirement Savings Contributions Develop Estate and Tax Planning materials Support broader Pfizer initiatives

15 Workplace Guidance Offerings Over-the-phone Consultations 4,700 5,600 7,500 7,500 On-site Seminars Webinars Support Days

16 Embracing the Path to Financial Wellness Dina Pon Assistant Vice President of HR GEICO

17 GEICO Wellness Strategy Vision Inspiring associates and their families to live healthier and wiser Mission GEICO strives to support our associates and their families in achieving their physical, emotional, and financial goals by empowering them to optimize their well-being Goal Improve participation and engagement

18 Profit Sharing Plan Key Metrics Participation rates Elected deferral rates Portfolio construction Hardship withdrawals 100% participation rate 0% 94% 85% 78% 79% 2013 YE 2015 YE 10.0% average elected deferral rate 0.0% 8.6% 8.6% 5.2% 4.7% 2013 YE 2015 YE 100% percentage of participants with a balanced strategy 0% 80% 75% 71% 66% 2013 YE 2015 YE 10.0 monthly withdrawals issued per 1,000 active participants YE 2015 YE GEICO Vanguard Benchmark

19 Current: behavior-based campaigns, online nudges & education Behavior-based campaigns Targeted, relevant s delivered on a monthly basis leveraging a test and learn strategy. Recommended savings rate nudge A personalized online experience that makes it easy to take positive action. Online education lessons Initial suite of 11 lessons include topics ranging from why join your plan to how much to save.

20 Future: data driven, targeted solutions Education Meetings and Webinars Financial Freedom Create your plan Get on track Lesson Helps employees better balance their financial picture Explores the two keys to a comfortable retirement saving sufficiently and investing wisely. Answers the question, Am I on track for retirement? Audience Employees who need a basic financial wellness primer; low savers. Established participants with > 20 years until retirement Participants nearing retirement (10 20 years out). Call to action Set up an emergency fund; raise retirement plan contribution. Raise retirement plan contribution; improve portfolio construction. Model retirement income; obtain a Social Security estimate.

21 HelloWallet Targeted Strategy Cumulative Adoption Rates The Goals 3,845 5,255 5,496 5,710 5,787 5,934 6,044 6,082 6,114 6,273 6,448 6,616 6, Identify and target the most effective marketing channels 2. Match HelloWallet s average and conversion rates 3. Achieve 100% fulfillment of the 4,800 HelloWallet licenses purchased 4. Utilize testimonials for future promotional strategies at the organization The Rollout Strategy I have fallen in love with the HelloWallet service! I m not sure where to begin here, I just love having all of my finances reviewable in one place. Checking, savings, loans, credit cards, mortgage, and even my 401k and in one application. -Jason G. Multi-channel communications approach including: Comprised of 3- s series s optimized based on behavioral tactics such as day of week sent, sender and additional variables in employee responses to communications, including demographic factors such as gender. Live webinars Onsite events Print and digital collaterals Social media Internal intranet articles

22 Utilization Levels for HelloWallet Member Age Distribution Member Income Distribution ,800 1,600 1,400 1,200 1, to to to to to or older Active Last 30 Days Active Last 60 Days Active Last 90 Days GEICO % 1+ Linked Accounts % 1+ Budget Items % On The Guidance Roadmap Active Last 30 Days Average HelloWallet B2B Members Active Last 60 Days Active Last 90 Days % 1+ Linked Accounts % 1+ Budget Items % On The Guidance Roadmap 22% 29% 35% 63% 40% 7% 14% 19% 22% 40% 32% 7% Active means that members have logged in or opened an in the past 30, 60 or 90 days, so as long as their last engagement didn t occur on their registration date.

23 Improved Financial Wellness Our HelloWallet Members are $500 Increase in Median Savings $2,390 Decrease in Median Debt Better prepared for emergencies after just 6 of use. Decreasing debt balances after just 6 months of use. 5.5% increase in HelloWallet s Wellness Score Improving overall financial wellness after 6 months of use. 8.4% increase in HelloWallet s Wellness Score Improving overall financial wellness after 12 months of use.

24 Embracing the Path to Financial Wellness Rich Linton President of Large Market and Retail Wealth Management Voya Financial

25 On Retirement Every American worker should have the tools and information to build a secure retirement Regardless of income, age, or life stage We can achieve sponsor business goals and educate and inspire employees to create a real impact on income in retirement This work is our mission and privilege CN

26 What drives our mission Today s accumulation Teaching and preaching Retirement: Only focus Transactions Lifeless plan data Deceptive big number Tomorrow s outcome Learning through behavior Holistic financial planning Actions Plan health, insights and actions Actual monthly income

27 Reframing the conversation Retirement income is at the core Participant experience Sponsor experience

28 The employee journey Distinct experience for employees Data-driven strategies that inform actions and change behaviors Continual reinforcement of income thinking Advice and solutions for each stage of an employee s life Drive actions that produce positive results Redefining Retirement Readiness. Voya Retirement Research Institute. March 2013.

29 Matt s journey Disengaged with knowledge gap Employee Profile: Matt Age: 28 Customer support specialist Single Household income: $35,000 Engaged and informed

30 Alexandra s journey Saver but anxious about getting it right Employee Profile: Alexandra Age: 42 Business analyst 3 children Household income: $165,000 Investor with an organized strategy

31 George s journey Single lens view with key concerns Employee Profile: George Age: 65 Eligible to retire Married Household income: $58,000 Holistic plan and confidence

32 Help employees engage and take action Be Ready for their financial future: Messaged + 61% Participated +144% Used advice/planning services +147% Took positive actions + 48% Increased contribution rate/amount+42% Increased catch-up rate/amount +92% Changed asset allocation +62% 40% Participate Avg. 1 action taken for every 3 messaged 38% Accep t Source: Voya myorangemoney DataMart, Large Corporate Market, July 1, 2014 June 30, 2015.

33 Embracing the Path to Financial Wellness Michael Domingos Vice President, National Corporate Strategy & Distribution Prudential Retirement

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